It’s Not Easy Being Green

Michael Green's a stickler for value, even in an overheated market

Tidewater’s fiscal 1999, ending in March of that year, he projects earnings of $4.95 a share.

Green Tree Financial Corp. (NYSE: GNT), a financer of manufactured housing, is now a bargain, Green says, after selling off in mid-November, following the company’s decision to take a reserve to cover prepaid loans. Green feels the market overreacted to the news. He feels that despite the move Green Tree’s “new business is healthy,” and believes the company can earn $3.93 during the coming year.

Another favorite is Deere & Co. (NYSE: DE), the nation’s biggest manufacturer of tractors and farm equipment. Green says the company is improving profit margins by keeping production costs down and closing unprofitable plants. Investors may have fled the stock late last year due to worries about economic problems in the Asian and Brazilian markets, but Green thinks that made the stock an even better bargain. “Deere’s expanding overseas, but the lion’s share of the company’s business is in the U.S,” he points out. He thinks the company can earn $4.25 a share in 1998.

Finally, Green likes railroad company Norfolk Southern Corp. (NYSE: NSC). “This is the premier railroad in the transportation industry,” Green says, citing Norfolk’s high profit margins and cost-cutting efforts. The company pays a dividend that yields 2.4% compared to an average 1.75% for the S&P 500 is the icing on the cake. Green expects earnings of $2.30 for 1998.

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